I can send you a list of CS units that were at the Battle of Lynchburg. I've been trying to find out about this flag too.
Have you seen the flag? What style is it? I remember communicating with the museum that has the flag, but they didn't have much to help me with.
I seem to think that it was a 1st National. Maybe it was not captured from a CS unit, but was a CS flag taken by the WV soldier off somebody's porch or some such. If it had been a bono fide battlefield capture, he would've gotten the MOH. There was one MOH awarded at the BOL, but it was for a fellow rallying his company.
Please contact me and perhaps we can figure this one out.